APA helps prompt suit against California MCOs

APA helps prompt suit against California MCOs False advertising

The CPA suit charges that Aetna?s advertising of its benefits violates California?s False Advertising statute as well as California?s Unfair Competition Act and Consumer Legal Remedies Act. The association points out that the four-visit limit is not disclosed in the promotional materials that Aetna has on file with the California Department of Corporations, which regulates HMOs that operate in the state. Instead, the material describes the mental health outpatient benefit as 20 visits per calendar year, 100 percent reimbursed after a $20 co-payment by the enrollee.

Even the most responsible consumer who spends time reading promotional material about their health-plan choices and researching their options would not make the right choice because the information provided to them is false, says Michael Haley, PhD, CPA?s executive director. 'Consumers could only make decisions as good the information they get,' he says. 'When Aetna is deceitful, it is impossible to make a good choice.'

Instead of focusing on patient care, Aetna?s undisclosed four-visit limit helps the company to turn a profit. 'The managed-care company is misinforming the public about what is available and only providing insufficient treatment,' Newman says. 'They are controlling the treatment for purposes of profit and financial interest rather than patient needs.'

The plaintiffs believe that Aetna?s contracts with HAI, and HAI?s contracts with Adventist, are capitated, flat-rate contracts that create a financial incentive for these provider organizations to dictate mental health treatment decisions in order to restrict or limit the benefits advertised by Aetna. Capitated contracts provide a set amount of money to finance care for a pool of patients. The contract is administered by a managed-care company, which keeps a percentage of the money to cover administrative fees and uses the remaining funds to pay contractors to provide the services.

Limiting care

CPA also charges that Aetna, HAI and Adventist often purge from the network or do not give patient referrals to providers who seek to use more than the four-visit limit to offer medically necessary care for treating depression, aggression and attention deficit disorder. The plaintiffs believe that Aetna, HAI and Adventist steer patients to providers with a history of low utilization so that the managed-care company can make more money. They believe that a small, core group of providers?about 10 percent of the network providers?get most of the referrals.

Plaintiffs also charge that Aetna, HAI and Adventist routinely disregard practitioner determinations of medical necessity.

'They sell you a product in which they promote this panel of providers that they tell you are high-quality professionals and when you need access alse advertising

The CPA suit charges that Aetna?s advertising of its benefits violates California?s False Advertising statute as well as California?s Unfair Competition Act and Consumer Legal Remedies Act. The association points out that the four-visit limit is not disclosed in the promotional materials that Aetna has on file with the California Department of Corporations, which regulates HMOs that operate in the state. Instead, the material describes the mental health outpatient benefit as 20 visits per calendar year, 100 percent reimbursed after a $20 co-payment by the enrollee.

Even the most responsible consumer who spends time reading promotional material about their health-plan choices and researching their options would not make the right choice, because the information provided to them is false, says Michael Haley, PhD, CPA?s executive director. 'Consumers could only make decisions as good the information they get,' he says. 'When Aetna is deceitful, it is impossible to make a good choice.'

Instead of focusing on patient care, Aetna?s undisclosed four-visit limit helps the company to turn a profit. 'The managed-care company is misinforming the public about what is available and only providing insufficient treatment,' Newman says. 'They are controlling the treatment for purposes of profit and financial interest rather than patient needs.'

The plaintiffs believe that Aetna?s contracts with HAI, and HAI?s contracts with Adventist, are capitated, flat-rate contracts that create a financial incentive for these provider organizations to dictate mental health treatment decisions in order to restrict or limit the benefits advertised by Aetna. Capitated contracts provide a set amount of money to finance care for a pool of patients.

The contract is administered by a managed-care company, which keeps a percentage of the money to cover administrative fees and uses the remaining funds to pay contractors to provide the services.

Limiting care

CPA also charges that Aetna, HAI and Adventist often purge from the network or do not give patient referrals to providers who seek to use more than the four-visit limit to offer medically necessary care for treating depression, aggression and attention deficit disorder. The plaintiffs believe that Aetna, HAI and Adventist steer patients to providers with a history of low utilization so that the managed-care company can make more money. They believe that a small, core group of psychologists?about 10 percent of the network providers?get most of the referrals.

Plaintiffs also charge that Aetna, HAI and Adventist routinely disregard practitioner determinations of medical necessity.

'They sell you a product in which they promote this panel of providers that they tell you are high-quality professionals, and when you need access to one, they refer you to one,' says John McDermott, CPA?s attorney. 'Then they have someone else second-guessing and overriding the medical treatment recommended by those providers. It?s like calling a plumbing company to send out a plumber and then having someone from the same company arguing with the plumber over what is needed. You wouldn?t buy services from that company in a second.'

The provider organizations further discourage patient use of the contracted mental health benefits by making treatment authorization difficult to obtain, the plaintiffs claim. Although providers are supposed to be administering a crisis benefit, they often have to wait two weeks to get treatment authorization for their patients.

'The benefit as advertised is not delivered but the subject of a carefully orchestrated plan of undisclosed limitations imposed after the fact by Aetna, HAI and Adventist because the less of the benefit they provide, the more money they make,' states the plaintiff?s brief.

McDermott says the lawsuit will force managed-care companies to be honest with people about what is being sold. 'You can?t prevent managed-care companies from offering whatever product they want at whatever price they want, but they have to tell the truth about it,' he says.